What is the limit of liability in part D: Coverage for damage to your auto?

The limit of liability for damage to your auto under part D of an auto insurance policy is determined by the lesser of the actual cash value or the repair/replacement costs. This means that if your vehicle is damaged, the insurance company will cover either the cost to repair it or its fair market value at the time of the loss, whichever amount is lower.

Actual cash value typically represents the replacement cost minus depreciation, giving you a realistic valuation of the vehicle based on its condition before the loss. Repair/replacement costs refer to the expenses associated with either fixing the damaged vehicle or replacing it with a similar one. This approach ensures that policyholders receive compensation that reflects the value of their property fairly while also being mindful of the insurance company's limitations in payouts.

Other choices may refer to different forms of valuation or coverage, but they do not accurately represent the specific limit of liability stated in part D. The vehicle's resale value and market value can vary greatly and are not employed by standard auto policies as measures for liability limits. The total premium of the policy relates to the cost of the coverage rather than the limits of liability concerning physical damage to the vehicle.